Odds against him, Obama still betting on big deal

Jim Kuhnhenn/The Associated Press

March 1, 2013 10:28:36 AM

WASHINGTON -- A fiscal deadline all but blown, President Barack Obama says he once again wants to seek a big fiscal deal that would raise taxes and trim billions from expensive and ever growing entitlement programs. But with automatic federal spending cuts ready to start taking their toll, the path toward that grand bargain Obama campaigned on last year has significantly narrowed.

The president has summoned the top bipartisan congressional leadership to the White House, a meeting designed to give all sides a chance to stake out their fiscal positions with a new threat of a government shutdown less than four weeks away. There were no expectations of a breakthrough.

"I'm happy to discuss other ideas to keep our commitment to reducing Washington spending at today's meeting," Senate Minority Leader Mitch McConnell, R-Ky., said in a statement Friday morning. "But there will be no last-minute, back-room deal and absolutely no agreement to increase taxes."

For Obama, Friday's session would be his first opportunity to spell out his 10-year, $1.5 trillion deficit reduction plan in a face-to-face meeting with congressional allies and adversaries.

His chances are squeezed by anti-tax conservatives, by liberals unwilling to cut into Medicare and Social Security, and by a Republican leadership that has dug in against any new revenue after ceding to Obama's demands two months ago for a higher tax rate for top income earners.

On Thursday, two ill-fated proposals aimed at blunting the blame over the cuts -- one Democratic and the other Republican -- failed to overcome procedural hurdles in the Senate. Obama placed the responsibility on Republicans.

"They voted to let the entire burden of deficit reduction fall squarely on the middle class," he said.

The White House is still betting that once the public begins to experience the effects of the $85 billion in across-the-board cuts the pain will be unbearable enough to force lawmakers to reconsider and negotiate. But the consequences of the cuts --the so called sequester -- will likely be a slow boil. Obama this week said the effect "is not a cliff, but it is a tumble downward."

Indeed, much of the impact won't be felt for weeks or more than a month; others, like possible teacher layoffs, wouldn't take place until the new school year in the fall.

Polling suggests that some Americans are still unaware of the looming cuts, known in Washington speak as a "sequester," but the debate is well known to federal employees and the huge network of businesses, contractors and communities that serve Navy shipyards and military bases. Virtually every nearby restaurant, grocery store or car dealer is aware of the looming cuts.

Some states are facing more pain than others. Oklahoma has five military installations. Chris Spiwak, owner of Chequers Restaurant and Pub outside Tinker Air Force Base in Midwest City, said he's afraid he might have to lay off an employee or two.

"We have customers telling us that if they're furloughed, they won't be coming in as much," Spiwak said. "That's their expendable income. They'll be eating at home or bringing their lunches."

And there is widespread uncertainty in Virginia, where many of the 21,000 workers at Newport News Shipbuilding are bracing for the worst. Obama addressed shipyard workers this week about the dangers of the spending cuts.

"Everybody's nervous, worried about what's going to happen," Ronnie Hall, a 27-year-old fleet support apprentice, said before the president spoke.

The president, who has pushed for a compromise deficit package of spending cuts and new tax revenue, seems to have the upper hand among the public over the standoff. A Pew/USA Today poll this week found 49 percent of Americans would blame Republicans in Congress if Obama and Congress couldn't strike a deal. Thirty-one percent would blame Obama, 11 percent would blame both of them and 8 percent were unsure.

On federal spending in general, an ABC News/Washington Post poll released Wednesday found significantly more Americans in favor of Obama's handling of federal spending than Republicans in Congress, although neither side earned high marks. Half of the country disapproved of Obama's handling of the issue, while two-thirds disapproved of congressional Republicans.

The political stakes meant little to the workers gathered outside the Portsmouth Naval Shipyard this week during their lunch break.

"Both sides put us here," said Huntley, who had already lost his house because of his wife's medical bills. "At my age I should be in my golden years. But those things are gone. As the guys around me say, the golden years have taken the gold and just left me the years."

Next up for Congress and the White House is how to avoid Washington's coming crisis, which threatens a government shutdown after March 27, when a six-month spending bill enacted last year expires.

In Kittery, Do offered elected leaders a reminder: "They forget it's faces and families," he said. "There's a cloud over a lot of people."